Loan Spread Compression and Lower Equity NAV Drag on GNRT 2024-16A SUB
A majority stake of GNRT 2024-16A SUB traded yesterday, covering at...
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A majority stake of GNRT 2024-16A SUB traded yesterday, covering at...
Yesterday saw a relatively long list of CLO equity tranches on BWIC. Among them, SIXST 2021-17X SUB stood out, ranking in the top quartile of its 2021-vintage peers.
Among the recently liquidated deals, those managed by CIFC and Carlyle—such as CIFC 2013-1A SUB, CIFC 2015-1A SUB, and CGMS 2013-1A SUB—stood out with IRRs ranging from 12.8% to 15.2%.
Among the top performers are Oak Hill Advisors, UBS AM, and Palmer Square Capital Management.
This week saw two majority equity blocks on BWIC: GNRT 2022-10A SUB with $31 million notional and ELM17 2022-4A SUB with $35 million notional.
The table in this article summarises the findings on equity IRRs for both reset and non-reset CLO equity tranches. Reset tranches have materially outperformed their non-reset counterparts. Generally, stronger-performing deals are more likely to undergo a reset. Underperforming deals often face challenges in resetting due to the substantial equity capital required, and equity investors may be reluctant to commit further capital to weaker-performing transactions. That said, exceptions do exist.
EU CLO equity has outperformed US CLO equity, based on BWIC colour from a sample of approximately 446 equity tranches traded since July 2024 (source: SCI). This trend is also consistent with findings from 2.0 CLO deals that have been fully liquidated to date, according to CLO Research.
The table below summarises the performance of US CLO deals that have been redeemed year-to-date.
This analysis examines a sample of 1,456 deals currently within their reinvestment periods.
Since January 2020, OHA has generated impressive, above-average inception-to-date total return alpha, driven by its consistent focus on minimising portfolio losses. This approach relies on rigorous, ongoing credit research and the regular application of that analysis to portfolio re-optimisation. The manager’s investment strategy is built on the belief that close collaboration across industry teams and integrated access to all asset classes within leveraged finance provide a robust foundation for research and portfolio construction.
US CLO Manager Report: GoldenTree AM
US CLO Manager Report: CSAM
US CLO Manager Report: Elmwood Asset Management
The manager has built its investment strategy around the synergy between its BSL and direct lending businesses, maintaining a clear focus on areas where it holds a competitive edge. Guided by the principle of prioritising quality over quantity, the manager is not subject to the pressures of public shareholders to rapidly grow assets under management. Instead, it remains steadfastly focused on making prudent, long-term investment decisions—each and every day—that safeguard investors’ capital.
US CLO Manager Report: CIFC
